ING Pays $5 Billion for Aetna Units

Dutch Financial services group ING Groep confirmed Thursday it will pay $5 billion for the financial services and international units of U.S. insurer Aetna. The anticipated deal makes ING the world’s 11th largest asset manager and establishes it among top companies in the U.S. and Latin American insurance markets.

ING will pay cash, mainly from internal sources, to pay the $5 billion purchase price. It valued the deal at $7.7 billion, including $2.7 billion of outstanding debt which ING will assume.

Following the announcement of the deal, Standard & Poor’s removed from CreditWatch the ratings on ING GROEP N.V. and on all entities of the ING Insurance Group, where they were placed with negative implications on June 8, 2000. At the same time all ratings on ING GROEP N.V. (AA-/Stable/A-1+) and related entities were affirmed. (See list below for all ratings affected.)The ratings on ING Bank and related entities were affirmed on June 8, 2000. The outlook is stable.

The ratings were placed on CreditWatch owing to concerns over the proximity of the Aetna acquisition to that of the ReliaStar Life Insurance Group and the consequent strain on both the financial and the management resources of ING. Following discussions with ING management, Standard & Poor’s is satisfied that the strategic and economic benefits likely to flow from these transactions outweigh the risks inherent in integrating these two sizable businesses into the ING America Group.

Furthermore, Standard & Poor’s is encouraged that ING has already financed the Reliastar acquisition in full by successfully disposing of its significant equity holding in Aegon N.V. and other non-strategic investments.